Proceedings of the Standing Senate Committee on
Agriculture and Forestry

Issue 31 - Evidence - Morning meeting


MANIWAKI, QUEBEC, Friday, June 8, 2007

The Standing Senate Committee on Agriculture and Forestry met this day at 8:36 a.m. to examine and report upon rural poverty in Canada.

Senator Joyce Fairbairn (Chairman) in the chair.

[Translation]

The Chairman: Good morning and welcome. The members of the committee are pleased to be in Maniwaki, a town that has a rich and significant past and legacy.

Last May, the committee was authorized to study rural poverty in Canada. Last fall, we heard from a certain number of expert witnesses who gave us an overview of poverty in Canada.

[English]

We are now in the midst of the second phase of our research where we are meeting with rural Canadians in rural Canada. We have travelled to every province in Canada and we will be visiting the three northern territories in the fall.

Maniwaki's history and economy is tied closely to the forest industry, which in recent years, has endured numerous layoffs and mill closures with devastating consequences on our forest-dependent communities across this country. These communities face lower property values, an exodus of youth, the closure of local businesses, increased stress, health problems, a loss of services, and even a loss of schools. Often, it is the most disadvantaged who are the most affected.

Even for communities that have retained their mills, the continued appreciation of the Canadian dollar, the further possibilities of structural changes and global competition have contributed to a higher sense of anxiety about the future.

[Translation]

Rural Canada must face significant challenges, but there is hope and there are solutions. That is why we are here in Maniwaki this morning. We want to listen to your concerns, your stories, your ideas and your successes.

I have the pleasure of welcoming our first witnesses this morning: Jean-Pierre Dansereau, Director General, Fédération des producteurs de bois du Québec; Gérard Szaraz, strategic development advisor, Fédération québécoise des coopératives forestières.

[English]

Jeannot Beaulieu is appearing as an individual.

We are very glad to have all of you here. Welcome from all our colleagues.

[Translation]

Jean-Pierre Dansereau, Director General, Fédération des producteurs de bois du Québec: Madam Chairman, I would first of all like to thank you for the invitation. It is also a pleasure for us to be here in Maniwaki.

I would like to add that as well as being the Director General of the Fédération des producteurs de bois du Québec, I am also the Secretary-Treasurer of the Canadian Federation of Woodlot Owners. I have limited experience of rural poverty, but I would like to talk to you about forestry in the private sector, what we more and more often call family forest owners, and the role that they can play in the development of rural communities.

I sent you a document that summarizes the vision developed by the Fédération des producteurs de bois over the last few months. I will work from it to make a short presentation. I will not read it in its entirety.

On the first page, we point out the significant economic benefits that private forests can have, despite the fact that they are small properties of roughly 40 hectares. Therefore, there is limited income for each individual, but when we add up all of this economic activity, it is very significant. It is a fundamental economic activity. Forestry production is the social base of an entire sector of the economy, the forestry industry. Private forestry in Quebec, by providing 20 per cent of the supply, supports a significant part of this activity which represents billions of dollars. The private forest owners are seriously affected by the forestry crisis. Plants are closing, no longer taking in product, and are obliged to drastically reduce prices, which has a harsh effect on forestry producers. In some regions, people are even unable to sell goods. There are therefore businesses whose very survival is currently at risk.

In our sector, facing the consolidation that everyone says is necessary to the industry, we also have fears concerning our future potential to put wood on the market, therefore to continue to contribute to economic activity in rural areas.

Private forests also host recreational activities such as hunting and fishing, and are an important source of environmental goods and services for the population, as well as generating economic activity through the harvesting of wood. This is probably not sufficiently recognized.

On page 2, we explain among other things, the efficiency of the forestry sector. Over the last 30 or 40 years in Quebec, private forest owners have participated in forestry management plans. Instead of simply harvesting their forests, they have cultivated them. This has produced some conclusive results. We have been able to show over the last few years that we have increased forest productivity by 33 per cent when we deal with softwood. It would be possible to produce even greater increases in productivity if we continue, if we invest more. It would be interesting to do so in the southern forests. They are close to the factories, to the population. The infrastructure is in place to facilitate productivity. Rather significant gains in productivity are therefore possible.

Forestry planning also allows us to deal with environmental issues. Maintaining biodiversity, limiting the erosion of embankments, and protecting the quality of the air, the water and landscapes: These are the environmental goods and services I was referring to earlier on.

On page 3, we set out our vision. In summary, there is a sentence in the middle of the first paragraph that states:

Political momentum, along with improvements to the programs offered to woodlot owners, will allow for an increase in the impact of the efforts made on behalf of rural communities from an economical, environmental and social perspective.

How can we achieve this? The owners of large forests must be convinced of the importance of actively managing their woodlots for production or conservation purposes, rather than simply being landowners who use up their properties; they must use them for the good of society by developing and properly managing them. There must obviously be some compensation that covers the environmental goods and services provided. This is a challenge because all of society benefits, but no one individual wants to pay for clean air. They take it for granted. How can we ask that of individuals and how can we compensate them for their services?

You will also find other aspects, such as the need to protect investments that have been agreed to, increase forestry efforts, explore new ways of cultivating trees, non-forest biomass products that we can find in significant amounts, but that pose challenges in terms of harvesting and processing.

This last point is not insignificant, that is the need to reassure the population of the sustainability of forestry efforts, of the acceptability of forestry practices that have been in question in the public's mind, that unfortunately create a link between very large-scale forestry operations on public land and smaller-scale operations in private forests.

On the following page, we talk about means of implementation, how forestry management planning and the increase in opportunities can go hand in hand. This assumes investment, financial resources over long periods of production. The cycle of forestry production spans a 50-year period and that can reach 90 years for certain species. It is difficult to reconcile the lifespan of an individual or a family with the lifespan of a forest.

Government action therefore remains necessary in order to establish a climate that is conducive to forestry investments and to make up for the shortcomings of the market. Unfortunately, the amounts received for wood sales in the forest do not allow for compensation for the work, and the cultivation of these forests. The markets are geared to the harvesting of wood that grows naturally, that is to say in conditions that exists elsewhere on the planet, in the southern hemisphere, where growth conditions are much more favourable than they are here.

With our existing means, there are things that can be done. I feel it is important to emphasize things that are within the purview of the federal government here before this Senate committee; some parts of the solution involve the federal, provincial or even municipal government. I draw your attention particularly to the role that the taxation of income must play in encouraging owners to participate in forestry works. Some relatively simple changes could be made to promote the use of these properties. The first of these changes, because we are discussing small properties, would be to make the idea of a reasonable expectation of making a profit more understandable when we are working on a small scale. I will not go into the details at this point, but if you have any questions. I would be pleased to answer them.

As for income averaging measures, forestry production, as I said earlier happens over a long period of time. When an owner has a small property, many years can go by without his having any income, but once the logging starts, it very quickly generates significant income that is taxed at the very highest level. There are therefore some owners who are reluctant to pay all that income tax. There are problems at that level.

One very technical point, but one wherein you could play an important role, is the provincial government's tax on forestry operations. You may ask me: ``Why recommend an intervention in an area of provincial jurisdiction?'' This tax on forestry operations is aimed at net incomes of $10,000 and more for operators and it is simply a transfer mechanism between the federal and provincial governments. As operators — and Jeannot is surely one of these — they must pay this tax and then ask for a refund from the federal government for two-thirds of it, and the provincial government for the remaining third. This is a useless administrative inconvenience for sums that are, we believe, ridiculous, and marginal on the scale of governmental budgets. We are talking about a few dozen millions of dollars whereas the administrative costs, both for individuals, businesses and the government apparatus, greatly exceed the benefits. If you could intervene and have this simplified, it would be greatly appreciated by the operators.

Among the other elements that are also identified in our list, the property tax system could probably also play a role in protecting investments or helping woodlot owners in the event of natural disasters. When there is a blowdown, or a fire, investments that have been maintained over decades can disappear overnight, which represents a significant economic disaster. We must develop means of defraying the costs and services for woodlot owners who adhere to environmental values, and help them to develop ways in which the properties can serve the environment as well.

We have shown that it is possible to base government policies and programs on the setting of objectives, not only by making funds available for the pleasure of doing so, but by taking specific goals into consideration in terms of cubic metres produced, the hectares managed, and the services rendered.

I conclude by drawing your attention to the link between agriculture and forestry, and your concern with poverty in rural areas. Historically, there has been a strong connection between family forestry and agriculture. Because of specialization, this connection has tended to die out somewhat over the last few years. We now see an opportunity to strengthen those connections. These two activities are easily complementary, and can help families to stay in rural areas, to make a living there and to see the economic spin-offs.

The second link I would draw your attention to is that between city life and country life. There is a growing shift in the ownership of private forests. Many professionals, people from urban areas, are buying wooded properties in order to get back to nature. Often, they are not aware of the realities of living in the country; they have values that are not necessarily those of their new communities; however, they are not impervious to those values. With incentives, they will become interested in enhancement, in the active management of their forests, and they will have a better understanding of the rural reality. They can be wonderful ambassadors in the urban areas so that certain realities become known.

Gérard Szaraz, Strategic Development Advisor, Fédération québécoise des coopératives forestières: Thank you, Madam Chairman, for allowing the Fédération québécoise des coopératives forestières to present its perspective on rural poverty.

I will limit myself to the one-page sheet that was distributed to you this morning as a guide to my presentation. To put things into context, our study on poverty starts ``upstream from processing plants,'' as we say, that is to say, in the forests where we find workers carrying out their jobs in harvesting and forest planning; in businesses, including of course forestry cooperatives and other development companies, as well as forestry communities which are also very present in the forestry sector. I see rural poverty as being connected to social and human capital. I remind you that the OECD defined human capital as the knowledge, skills, competencies and attributes embodied in individuals that facilitate the creation of personal, social and economic well-being; social capital represents the networks and norms, the values, the shared convictions that facilitate cooperation within and between groups. In the era of sustainable development, we talk a lot about the environmental dimension, the economic dimension, but the dimension of social human capital is equally important. Poverty can therefore potentially be seen as an erosion of this capital. When we talk about forestry cooperatives that are institutions that come from collective entrepreneurship, these are businesses that contribute to the fabric of social capital. People, workers, are potentially through their actions very significant players in strengthening this capital and in difficult situations, they can be affected.

The premise of my presentation is to say that forests will be healthy and productive to the degree that the people who work in them are healthy and productive. These same forests are an important source for local and regional development. That is the background.

A few words about forestry cooperatives: these are mainly forestry workers' cooperatives, workers who own their businesses and whose primary objective is to provide employment for their members. These companies are rooted in their communities. The oldest cooperatives are over 65 years old, are a product of the economic crisis of the 1930s, and were created in order to provide jobs to farmers. An analysis of the survival rate of cooperatives shows that they are much more deeply rooted than private-sector businesses. They have greater longevity. They contribute a great deal to regional development because the benefits are not paid out to an anonymous shareholder who often lives very far away. They provide salaries to people who live there, through the purchase of goods and services and the reinvestment of the capital produced by the workers. There are 41 members of the FQCF. This includes approximately 4,200 workers with sales last year of $310 million. These cooperatives planted over 1 billion trees in Quebec over the last 20 years. They are responsible for over 50 per cent of the silviculture of public forests. They harvest approximately 15 per cent of the timber. Some are involved in processing, others have nurseries or work outside of the wood-production sector as such, in the harvesting of medicinal products, of mushrooms, et cetera.

I will set out in five points the current situation concerning problems in the Quebec forestry sector from the perspective of the forestry cooperatives. One very important component for the cooperatives is the ability of our forestry system to create forest values. The processing of wood in plants creates value; however, there are deficiencies insofar as the creation of values in the forest is concerned, whether it be in healthy and productive forests, in businesses, or in workers who are fully utilized in the creation of these forestry values. Why? This is partly because of the standardized products market, where more and more wood is sought at a lower and lower cost. We have a great deal of difficulty justifying quality forestry production in seeking new markets, when looking at volume alone. The forest remains because it has been developed or designed with the processing plant in mind and this is a cost to be reduced rather than a resource that we seek to maximize. Essentially in the current situation, no one, not the government nor the businesses have a framework that allows them to be interested or motivated in improving production. Therefore, if the forest creates no value, how can the people who live off it develop themselves? That is my first point.

The second point concerns making forestry developers responsible. Currently, we in Quebec as well as across Canada are living in a world where forestry developers are businesses that harvest the forest through subcontractors on a short-term basis. These are seasonal contracts. The accountability is on a very limited performance. There again, one might wonder how the workers and the businesses can develop their abilities if they can only function on a precarious, short-term basis.

The third point which we care a great deal about will be the economic benefits for the communities. In the 1940s, there were some 100,000 people working in the forests, on log driving, and mainly on harvesting. There are approximately 16,000 people working in this area today in Quebec. Mechanization, specialization and a longer work season have of course contributed to that, but nevertheless we can see there has been a significant decrease. For your information, over the last five years, there has been a 40 per cent decrease in labour in the forestry cooperatives. The Maniwaki region where hardwood thus been cut for a long time has experienced to this very great difficulty.

We talk a lot about the dependency of communities. Currently, the forestry communities — and I am taking this from a study done in British Columbia — are destabilized because of economic considerations, but also because of structural considerations within the forestry sector, due in part to the concentration and consolidation of the wood products industry. We could talk about the ``Wal-Martization'' of the forest as a result of the specialization and the dependency on the commodities markets, which demand more and more volume at lower and lower costs, as well as the control of the territory that is increasingly happening from a distance. Forestry decision-makers are moving further and further away from the forests, even beyond our frontiers, in government and big businesses. There again, how can we avoid a rural exodus and the decay of our communities with a forestry regime that takes these values into account? As far as having confidence in forestry management is concerned, you have had the opportunity through a previous study to see on a Canadian scale that the forestry practices and policies have been brought into disrepute. In terms of forestry culture, Quebec, Canada is a forest nation; but is the forest really at the heart of our cultures? Of course, this has a disastrous effect on the perception of forestry work. Every day we hear forestry workers telling their children not to work in the forest, because the work is difficult and is not socially valued. How then can we rebuild this trust?

My final point concerns the business model and industrial configuration. Currently, we have a single forestry management model that has been given to the forestry industry. We can see that the competitiveness of the industry is at stake. Worldwide trends ensure that we will have more and more difficulty doing so. We know that diversity is a good principle in nature to ensure the survival of species, but diversity is also good for our business and the way in which we manage the forest.

I will take a few minutes to talk to you about the forestry workers who are at the very heart of our concerns. We are talking about the people who plant the trees, who maintain the forest and who are mainly in charge of the harvesting. We can say that they are the final link in the chain between the market, the industry and the forest. Their front-line role includes a lot of risk transfer that they must assume, but not necessarily a share of the wealth. I must even emphasize that they are ignored. The Quebec government through the Ministry of Natural Resources published statistics two days ago concerning job losses in the forestry sector that amounted to 10,000 people, however they do not account for the people who work in the forest. Working conditions are often difficult, and annual income is very low. There has been no real growth in compensation. The work is difficult, often paid at a flat rate, according to production. For a senator who is well aware of the VO2 max or workload, forestry workers who work manually make an effort that is 78 per cent higher than those in the industrial sector. They would probably make very good hockey players, but we understand that forestry work is very difficult. The unemployed period for silviculture workers and manual cutters, that is to say 4,000 or 5,000 people, varies from 19 to 28 weeks; they are caught in an unemployment-work cycle, and a situation where the work periods are shorter and shorter. It is what we call the black hole, a longer and longer time period when employment insurance has been exhausted and the return to work has not yet been achieved.

The population is aging and newcomers are not in place. Registrations in professional training for forestry development have decreased by 40 per cent over the last six years.

In conclusion, future perspectives, as Bernard Derome would say, if present trends continue, are the following: plant closures, consolidation, job losses, and loss of communities. We know that currently in Abitibi, there are many forestry workers who are retraining in the mining and hydroelectric sectors. These are people who will not necessarily return to the sector. The vision of the forestry cooperatives however remains positive. We want to create added value in the forest to the benefit of the workers, communities, regional, provincial and national economies. The forest can be seen as a social project: healthy forests, industry vitality, use of the land and regional development, supporting workers and moving from harvesting to cultivation of the forest, where our forestry workers will truly be the gardeners of our heritage.

In three or four points, what can we do in the short term? The industry's competitiveness is a key point and we have to work to reduce the cost of wood; the consolidation of the industry is necessary, we recognize that. It will be difficult, but in order to be competitive, it must be done; adapting and modernizing the management plan and diversifying markets; attempting to get out of the infernal or unbearable commodities market cycle; making developers accountable, those that work in the forest; working on and improving social acceptance of forestry practices. We talk about climate change, and wood being a green product as compared to cement, steel or plastics. We have a lot of advertising to do on that side; finally, the management framework has to be brought closer to the ground, the making of certain decisions must be decentralized in order to counter the effect of headquarters that are farther and farther away from the forest, so that the people who actually live there can also participate in the making of these decisions.

Jeannot Beaulieu, as an individual: I thank you for giving me the opportunity to talk about what I call the great distress that the forestry regions of Quebec are currently experiencing.

First of all, I will introduce myself as a maple and forestry producer. We run a maple stand of 23,000 taps and we cultivate 940 hectares of forest. The business has existed since 1985. It employs three people full-time and two on a seasonal basis. I should say ``employed,'' because since the beginning of the forestry crisis, two of the full-time employees have had to go on employment insurance, and one of them had her claim rejected.

I can state that over the last 13 years, we were independent of employment insurance as we worked year round. I can assure you that this is not the norm in my region. I am a model of rural viability. One could consider that we are a model of rural viability because of our structure and our activities which are forestry cultivation and the production of maple syrup, but there are not many of us in Quebec who live off the forest in this way. I believe that forest tenure has to change in certain regions where the nearby public forest is easily accessible. Having been a tenant farmer, in the model forest of the Lower St. Lawrence for five years, I can tell you that the tenant farmer formula is viable, as an owner, but not as a renter — because the tenant farmers were renters on the territories.

So it would be feasible to put forestry workers on 1,000-hectare units so that they in turn can earn a living. It would be their responsibility to earn income by managing the forest and ensuring income for future years. In this fashion, large tracts of land, which are frequently over-exploited by industry, could be transformed into forest gardens where micro-forestry practices are used, to ensure that no wood substance is lost as a result of a large territory being managed by one manager. You would have proud people, with roots in the community. For subsequent generations, I believe that the future of the regions depends on sharing the wealth with the people who live there so that first of all, the land can be developed and we can develop the tremendous pride of woodlot owners who care for the forest on a daily basis, thereby providing for the future of our descendants.

Today I care for the forest myself, but primarily for my children, having the great privilege of working together with my son, passing on this passion over the years. But today, I can proudly say that I am doing this for my descendants because a few days ago I became a grandfather. I would like to even take this opportunity to circulate the photo of one of the wonders of the world because, in my opinion, a human being is the most marvellous wonder of the world.

We have to guarantee the future of the rural regions by giving the people who live there an opportunity to earn a living from the forest. In my opinion, managing the forest is a privilege that must be shared with many more people. I go to sleep every evening knowing that I have improved part of the land.

Caring for the forest is a passion for me, but it is first and foremost a profession.

Senator Segal: I would like to thank our three witnesses for their contribution to our research. Our committee is in the process of finding ways to make recommendations to the government in order to improve the plight of our rural regions in Canada, including the agriculture and the forestry sector. Mr. Dansereau, you referred to the property tax system in terms of taxation. If you had an opportunity to make a key recommendation to make a change that would help the members of your federation, what would your main suggestion to the federal government be?

Mr. Dansereau: My comment did not pertain to property taxes, but to income tax. The recommendation would be very simple. It would be to recognize that a woodlot owner, who has the forestry development plan for his property and implements it, be recognized as someone who has a reasonable hope of turning a profit, even if it is in the long term. Right now, the tax authorities can tell a taxpayer, ``You're making significant investments, these are micro- business expenditures, but they are expenditures. Since you will not see any income until 30 or 40 years, we will not recognize this investment and you will not be able to deduct them from another source of income.''

Senator Segal: Generally speaking, for small- or medium-sized businesses, not so much in the forestry sector but in the manufacturing sector, governments allow for some depreciation every year which provides some measure of flexibility in terms of cash assets. Are you looking for some way to ensure that forestry workers will have an opportunity to use this annual deduction?

Mr. Dansereau: The deductions are not necessarily annual. Indeed, what we are looking for is more certainty. If I, as a small woodlot owner, do some work, I declare a loss the year I do the work because I will not be getting any income until decades down the road. The tax department may recognize the loss for some years and then come back, four or five years later, and no longer recognize this expense and seek a significant reimbursement from the woodlot owner. This same individual, when he calculates his sales income for wood in 10, 20 or 30 years, will be taxed at the maximum rate because the income may be high, and he will not have benefited from the expense deduction. There is too much time between the expenses and the income. Inflation will depreciate the value of the expenses to the point that when the income is realized, the net income will be very significant and will be taxed. If it were possible to deduct income expenses from other sources, this would be a major incentive, and it would provide the woodlot owner with an opportunity to invest. Society will benefit from the future economic spin-offs, once the lumber gets into the production chain. The change is very simple to make.

Senator Segal: Mr. Szaraz, I would like to ask you a question about worker training. You discussed the problem of unemployment; when the economic cycle is down, many workers leave the forest and that creates a problem when the cycle bounces back. With respect to the training and programs available in CEGEPs, in forestry colleges, in your opinion, are we replacing our workers, creating a new generation, or is everything done on a very informal basis without any government involvement in preparing future forestry workers?

Mr. Szaraz: Yes, as far as forestry workers are concerned, although we do have well-established professional training programs at the college level, and university technician training, I think that the situation is changing. Values are changing and programs must be better adapted. Businesses, such as the cooperatives, often realize that young people who are prepared for physical work in the forest study in an artificial bubble, and when it is time to actually work in the field, it is very difficult. We know that the work is paid at a set rate. You get so much per hectare, so much per cubic metre. A person who begins and who is not very productive has high costs and is unsuccessful.

In think that it is important to promote coop business internships; I am not talking about forestry cooperatives, but rather a cooperative formula between the training institutions and the businesses to enable people to gradually acquire on-the-job skills.

The Lower St. Lawrence area has had some interesting experiences in mixed compensation to enable people to start with a base salary and then gradually work up to payment based on performance.

There is another very important aspect, still in its infancy, but important, and that is to develop a wide-range of skills. Certain forestry work is done in a particular season. We are dealing with cultural barriers. A logger has a very different personality from a tree planter. We need to what I would call professionalize forest trades, equip people so that they are more versatile. Increasingly, in the forestry sector, we are getting past this notion of viewing the forest simply as a pile of wood, so to speak; now we see it as an area for recreation, tourism, wildlife. So tomorrow's forester will be an individual who can cover all of these features. With multidisciplinary training, this person will be able to do something else when one part of the sector is experiencing difficulties.

Senator Segal: Mr. Beaulieu, first of all I would like to congratulate you on the new arrival in your family.

If a young girl or boy is interested in the forestry sector and wants to get involved, asks you for advice, says, ``I am young, I am very interested in forestry. I am going to move to a region where there is forestry and I am going to start out myself,'' what advice would you give to this young man, to this young girl, so that they could be successful in the industry?

Mr. Beaulieu: Under the current circumstances, for someone who wants to purchase a woodlot and derive an income from it, it is practically impossible given the value of forest properties. Even if the forestry properties have this value, I think that there should be some specific programs for forest investment. Indeed, I put this question to the Financière agricole du Québec, I asked how long a managed forest, such as the ones we manage in our region, lasts. I was told that the forest would last forever. So then I asked them why they only wanted to finance it over one generation. I think that we need to have programs that would help people finance these properties for more than one generation, and after, we need to make it easier to transfer these properties from one generation to the next, not just to our descendants. We would also transfer part of the debt which is, in my opinion, much more attractive for those who are there right now and even for the descendants because they will have an interest in keeping it.

It is not easy. For a young person who wants to get started, this is where sharing the wealth comes into play. All of the public forests around our municipalities are easily accessible. If you want to use my example, you would hire five individuals. If you had 10 like me in my municipality, you would hire 50 individuals. Not many people are left. It would be a bigger employer than the sawmill.

Senator Segal: If we use the example of Canada Mortgage, which, along with the banks, finances the purchase of houses for young people with mortgages over 25 or 30 years, we need an instrument to help young people starting out in the forestry sector by providing them with a manageable funding period.

Mr. Beaulieu: Exactly, a new program, which would be tailored to forestry production. The farmer who has made a mistake today by planting his seeds can recover next year. But in forestry, you do not have that option. You have to be sure that you are making the right decision because the results will be visible in 15 years.

[English]

Senator Mahovlich: Has this area been affected by the softwood lumber deal that was set a year ago, and if it has, were you involved?

Mr. Dansereau: I will try to give an answer. Unfortunately, we are not from this area of Quebec. I represent private forest owners across the province.

I would say that the entire Quebec forest industry has been hit hard by the softwood lumber dispute. Even the hardwood industry has been hit because in our forests in most instances, the people who go in the woods have to harvest both hardwoods and softwoods. If the market goes drops in one type of wood, the other one has some difficulty.

The industry here in the Outaouais region has been one of the hardest hit in the province. Both the softwood and the hardwood industry, which is very important here, have experienced very severe problems.

One important reason why the hardwood industry is suffering is that the high quality of hardwood that the industry needs is getting rare. We have not invested enough in cultivating the forests; this is an error made in the past. It is something that should be addressed.

Senator Mahovlich: Is that a province-wide problem?

Mr. Dansereau: The problem is not just here; I would not be surprised to see the same problems across the country. It is clear that we have not invested enough. We have to go further and further away to get the wood. We have to go up North. The wood has not grown fast enough and the quality is not high enough.

Senator Mahovlich: It takes more time to cultivate hardwood than softwood.

Mr. Dansereau: Yes, hardwood takes a lot longer.

Senator Mahovlich: You were saying there are fewer and fewer people involved in lumbering and milling forests. Do you see corporations taking over the small wood lots similar to what is happening in Alberta and the West where corporations are taking over farmland? It seems that more and more corporations are buying up all the hectares for farmland. Is that happening in the forestry industry here in Quebec?

Mr. Szaraz: Yes, I think there is a major trend if we look at the production of commodities for markets where the price is set and you have to be a cost leader. One solution that is always seen as the magic solution is to consolidate and become larger. That is why I called it the ``Wal-Martization'' of the forests. We have this major trend taking place.

In addition, we have other products and this is where we have to be proactive. We have small-scale industries that have identified some interesting niches of specific products and they can be competitive. I think they are part of the solution for the future.

We have the two dimensions. We also have a competition between the two dimensions. Presently, it is the largest companies that are controlling management, but we hope that those smaller-scale operations will develop.

Senator Mahovlich: Do you feel that individual owners are more responsible than corporations in replenishing the forests? Some corporations, I understand, are very concerned about our forests and do a fairly good job.

Mr. Szaraz: Yes. We can see that through the certification process. It is also a matter of marketing, being good corporate citizens. We have good examples. It also depends on the context or the policy obligations they must follow.

There is room to move. What we would like to see is the people who are most progressive and most active gain more acceptance and more place and that their solution be taken up by others. In the present conflict and difficult situation, it seems that the larger competitors have a bigger share and a bigger say in the solutions to those problems.

Mr. Dansereau: Some of the best managed lands in Canada are owned by industry, by companies, but you probably will find that the land belongs to them. The same companies acting on private lands and public lands might have different ways of doing business.

I point that out because if the land is privately owned the owner has a vested interest in making it productive. If the conditions are there — and Mr. Beaulieu is a fine example of this — to allow him to make a living out of it, he will manage his land to keep it in good shape for his grandchildren. He will only go there and do bad operations if he is forced to buy in the market conditions and even then, knowing the man, I do not think he would do that, but some people might have to, especially when they have payments to make. They will go into the woods, harvest, and make it themselves. Private ownership is certainly a fact in pushing people to good management.

Senator Mahovlich: Mr. Beaulieu, you are a maple grower. How is the maple syrup industry these days? I know the prices have increased because I buy maple syrup. Is there plenty of maple syrup available?

[Translation]

Mr. Beaulieu: I would say that the maple syrup industry has, over the past five years, made very significant progress as far as its organization is concerned. A sales agency was established five years ago, along with a quota system for controlling production because we had an inventory of 60 million pounds of syrup, which is viewed today as a syrup reserve. We are always dealing with nature and sometimes we do not understand why nature does what it does. This year, for instance, we had a very small production in certain regions, the temperature was hovering too close to the freezing point, with the result that we produced 15 million pounds less than our 70 million pound production in Quebec. That dipped into our syrup reserve. However, that did enable development to occur. Other producers are going to want to set up shop and increase our production to 100 per cent because we were limited to 75 per cent of our capacity. However, I would say that this is a sector that has evolved tremendously over the past five years.

Senator Lavigne: Thank you for coming here and providing us with your comments on ways to improve the forestry worker sector.

Mr. Dansereau said that the government should change the way allocations are made with respect to logging so as to give people a better way to declare expenses when filing taxes, making it possible for them to perhaps derive more adequate income from the wood harvested. When you replant, do you replant all of the land? How much does replanting cost?

Mr. Beaulieu: Currently replanting is included in the regular development program. That means that it does not cost the owner anything to replant the forest.

Senator Lavigne: It is the government that pays.

Mr. Beaulieu: It is the government that pays.

Senator Lavigne: The provincial or federal government?

Mr. Beaulieu: The provincial government.

Senator Lavigne: Is this done in cooperation with the federal government or is this done by the provincial government alone?

Mr. Beaulieu: That is a good question. Perhaps Jean-Pierre can answer. But no, I think that it is the provincial government.

Mr. Dansereau: It is only the provincial government. The federal government withdrew in 1995, I believe, from the federal-provincial agreements that made it possible to fund such programs. Moreover, that caused quite a problem. There was a significant shortcoming. The federal government used to pay 50 per cent of the cost of these programs.

I would add something else. When I talked about allocation, I was referring to small woodlots. An average owner has, generally speaking, 40 hectares. For someone like Mr. Beaulieu, who owns several hundred if not thousands of hectares, a distinction must be made. For someone like him, the most attractive tax measure would no doubt be to remove Quebec's logging tax. That would release him from certain administrative obligations.

Senator Lavigne: Is this a Government of Canada or Government of Quebec logging tax?

Mr. Dansereau: This tax is levied by the Government of Quebec, but it is a mechanism established in agreement with the Government of Canada for transfer of funds.

I must confess that I would appreciate it if you could help us understand where this comes from and why. When we ask provincial officials, they find it difficult to find out why this tax was created. The data provided to us talks about some $20 million in revenue for the Government of Quebec, which needs to be clarified. It is really a mechanism which transfers money from the federal government to the provincial government, which comes along with administrative costs, declaratory obligations and ridiculous forms that operators have to fill out with respect to their gains.

Senator Lavigne: With respect to taxes, the GST, the QST, can they be recovered after the GST?

Mr. Dansereau: It really is a special tax.

Senator Lavigne: So you do not get the taxes back, the GST or other taxes?

Mr. Beaulieu: Yes, I pay just like any other registered businessman.

Senator Lavigne: Mr. Beaulieu, how many hectares of forest land do you own?

Mr. Beaulieu: My maple grove has about 75 hectares of production. All of the land is forested.

Senator Lavigne: With private businesses like yours, is your wood all exported or used here?

Mr. Beaulieu: The wood supplies the local sawmills, either as lumber or pulpwood.

Senator Lavigne: Earlier, Mr. Dansereau, you were saying that the U.S. tax had had an impact on the mills. Have they affected you a great deal, or not very much? I have been told that the wood is not coming to the mills here. Are the mills exporting the wood outside?

Mr. Dansereau: That has had an impact on the Quebec forestry sector because our processed goods are, for the most part, exported to the United States. Quebec is a province that, first and foremost, produces, as Mr. Szaraz said, commodity goods, 2 X 4s and paper made to a large extent from our softwood lumber. So the sawmill industry probably exports 70 per cent of its production to the United States. The impact for those of us in the private woodlot sector is that our industry is less competitive. It is more fragile. It cannot offer such attractive prices. So the wood producers are facing buyers who are exerting pressure to reduce prices to decrease their supply costs. The problem at the border therefore becomes the problem of the resource producers.

Senator Lavigne: If I understood correctly, your recommendations focus much more on taxing production and training people who will be working in the forestry sector. That means federal employment insurance programs that enable business to have government participation in paying people who are being trained, foresters or people who have forests to manage. I think that that was more or less what you were recommending?

Mr. Szaraz: Yes. I would add the forestry policy framework, the Quebec forestry system. This could also be applied to Ontario. There have been many changes made over the past few years in British Columbia. We must ensure that the framework has a facilitating feature. Currently, as far as our forestry workers are concerned, even if they do have access to land, in the public forest, for instance, and even in the private forest, the standards have become so restrictive that, as forestry professionals, we find it very difficult to be flexible. It is as though you are asking a baker to make the recipe using such and such an ingredient and there is absolutely no flexibility to make an evaluation. Increasingly we talk about having a management system that would enable us to be evaluated on objective-based results rather than on the means. We would like to see a forestry system that is more flexible as far as that is concerned, for those working in the forest, a policy framework that will enable us to demonstrate professionalism, see how things will unfold over the long run as well. Right now, the contracts are awarded on an annual basis. A business that does not even know in May how many people it is going to hire in June just about turns into a placement agency. The business has very little ability to say ``I am going to develop over five years, I am investing in equipment, in training.'' We have to leave this yoke behind as it has an impact on everything.

Senator Harb: Thank you very much for your presentation. The committee is studying rural poverty across Canada. My colleagues and I are also interested in knowing the percentage of people in your sector who live below the poverty line and we also would like to know what type of provincial or federal action is needed.

Mr. Szaraz: I did not provide you with one figure. We recently studied forestry workers. We compiled data; 21 per cent of the forestry workers earn an annual income of less than $20,000 per year. That is a measurement of their precarious income. Often this income is deductible because of the numerous costs. Forestry work is often carried out in quite remote areas, so the individuals have to pay for travel costs, the vehicle, et cetera. Indeed, only 70 per cent of forestry workers earn more than $40,000.

Poverty can be viewed in absolute terms based on figures, but it can also be viewed in a more relative manner, in terms of erosion. We have seen that over the past 15 years, the people who harvest the wood in the forest, in many cases, own expensive equipment and, generally speaking, a certain amount of wealth has been created in the sector, but in their case, their income has been stagnating for 15 years. Perhaps they are not poor today, but they are not earning more than they did 15 years ago. We have also seen, in the forestry sector, a segmentation of the labour market. If we compare the salaries of those working in the mills to those working in the forest, we can see that over the past 20 or 30 years, those on the processing side, where we say that the real wealth is created, have seen their salaries improve. However, for those working in the forest, there has been no mechanism enabling this wealth to be shared. So we certainly do talk about impoverishment rather than poverty.

Senator Harb: When the federal government discussed matters with the Americans and struck an agreement with them, industry made a great deal of noise, and this was industry in Western Canada and in Eastern Canada, including Quebec. Nevertheless, right now we do not see many people saying that the agreement has been positive, negative or neutral. I would like to know how you have reacted to this accord, and what impact it has had on your members in the private or public sectors.

Mr. Dansereau: If the Quebec industry representatives were able to negotiate the agreement today, I believe that they would negotiate something different from the one that has been implemented. This agreement, in particular, calls for the implementation of export quotas and taxes when lumber prices fall in the United States. Shortly after this agreement was negotiated, that is what occurred in the markets. Because of a falling construction industry in the United States, and heavy exports of lumber primarily from British Columbia, prices collapsed. The agreement, which had been negotiated, came into effect, and the industry, already made vulnerable because of dropping markets, must still deal with certain measures contained in the agreement.

With respect to the private forest, the main impact of this situation has been the slump experienced by the industry, particularly the sawmill sector. Historically, in the private forest, our people produced pulp, lumber of small size, logs that were easy to handle. This market has disappeared over the years. Producers have looked at the sawmill markets. And over the past few years, these markets have been disappearing. The plants are shutting down, they are no longer buying wood. In some areas, there is no alternative market. Consequently, the family businesses who depended on them are really compromised because the processing sector is fragile, is buying less and cutting back on production. There have been a succession of closures.

Senator Harb: As far as diversification is concerned, given that we have difficulty accessing the American market, do you intend to encourage your industry to begin diversifying by, for instance, exploring the Asian market, namely China, Japan or somewhere else in the world? Do you intend to take any action on that front?

Mr. Szaraz: I think that it is essential. To answer your question, our main interest with respect to the forest is to ensure that we produce a certain quantity and quality of wood that winds up in a destination, as much as possible, that is able to make maximum use of the product. In Quebec and in Canada, we have species, such as the black spruce, that could certainly yield much greater value.

Indeed, if we look at Quebec, I think that it is one of the provinces that, over the past 20 years, has had the greatest growth in secondary processing making it, today, almost on par with the primary processing sector. Curiously, in the region of Chaudières-Appalaches, for example, where there is perhaps 3 per cent of the forestry production, that is public forests, to give you an estimate, it is the region where there are the greatest number of forestry jobs because there are all kinds of door and window manufacturers.

So, yes, product diversification creates wealth. We have already seen this in globalization. We will continue to produce wood in Canada for the standard product market, commodities, in certain cases, because primary and secondary processing are related.

I will conclude by saying that we would really like to encourage the creation of clusters so that the regions can, for example, have all of the small industries working together in order to find added value.

Senator Segal: None of our witnesses this morning has mentioned or raised the issue of using forest waste for energy purposes. How can we use forest waste to create a significant resource in order to help both environment and industry? Has any serious thought been given to that in Quebec or, for the time being, has this not been viewed as a serious economic development matter?

Mr. Dansereau: I read in the newspaper this morning that the provincial government has announced the opening of pilot plants for the production of cellulose ethanol. This is an area that all stakeholders in the forestry sector are looking at, mainly energy production as well as bio-energy and biorefinery. From the standpoint of resource producers — because we do not process, we produce wood to be processed — the question we are asking is: What are the users of this resource prepared to pay for the wood? For us, there is a cost and that remains a concern. We are talking about energy, this may be the commodity par excellence that will compete with all other forms of energy whatever they may be. We need these business opportunities in order to have proper forest management because we can send low-quality fibre to this sector. If we want to produce high-quality wood, we have to find a market for these fibres. But our questions are about the prices that we may see on these markets.

Mr. Szaraz: The degraded state of our forest around Maniwaki, for example, and the difficulty in finding markets for this kind of wood that cannot be used for rotary cutting or sawing, means that this will be a good way to rehabilitate this large degraded forest, and it is an interesting solution. Many have been taking a very serious look at this at all levels.

Senator Segal: So subsidies will be needed to manage the risk.

Mr. Dansereau: One interesting angle that you could look at is the community side of energy production. When we go to certain European countries, we realize that that there are production plants that supply a hospital, or a small community. This is a way for communities to take things in hand where resource producers supply the plants of their own community to provide energy.

Senator Lavigne: Mr. Beaulieu, Jean-Pierre was telling us that you have thousands of hectares of wood, so surely the Government of Quebec should help you. I am sure that sometimes you must tell yourself that this may be worth $4 million and if you sold it you would be a millionaire. What you said earlier was true and you spoke from the heart. I do not think you are man who would sell your land because you have a family. But I am sure that those who do not have a family would be tempted to sell off and collect those millions. This is why in Canada we see a lot of Americans and foreigners who come to buy off our assets in Canada and that is unfortunate. That is what you were saying earlier and we are happy to hear you say it. It is important to be aware of our needs in order to conserve the assets of Quebeckers and Canadians, so that we can be producers with a heart here in our own home, as you are Mr. Beaulieu. Thank you very much.

Mr. Beaulieu: To answer your question, first of all I do not have thousands of hectares, it is less than one thousand. It is 940 hectares. There is an interest in speculating on forest property and that is what led to forested land being worth incalculable prices in some places, especially in major centres. Even in the current context, I can tell you that the objective is not to sell it or to dilapidate it. Earlier we were talking about rural poverty. It is true that employment insurance reduces rural poverty, but it should not be seen as a permanent long-term objective. At the outset, these places offer a very good lifestyle. These regions are extraordinary places to live. But we do not need all that much in order to be able to create enterprises, small companies that would employ two, three or four people, and save their regions from dependency on employment insurance.

Our objective at the outset, when we decided to start up our business, was to not rely on big business to create jobs in our region. We said: ``We will create our own jobs to stop the dependency on social programs.'' It worked. Why would it not work for others as well? Why could it not be done on a larger scale to ensure the vitality of our regions?

[English]

The Chairman: Thank you. Your presence here today has been very helpful to us. I think that my colleagues would agree with me, that we have not heard some of the points in previous testimony.

While we wait for our other panel, I would like to mention other people in our audience this morning. Mr. Georges Lafontaine, political assistant to provincial member Stéphanie Vallée is in the audience and Ms. Danielle Ménard who represents the village of Maniwaki. We also have with us Darlene Lannigan assistant to the minister who has so many different responsibilities. Mr. Lawrence Cannon, Minister of Transport, Infrastructure and Communities is unable to be with us today. I am sure Ms. Lannigan will be of assistance to the committee. We also have from the wilds of Prince Edward Island, Mr. Wayne Easter. He is a long-time supporter and advocate of agriculture across the country. We are very glad to have him here today.

On our next panel, we have Mr. Philippe Larivière who is Coordinator of the Centre Jean-Bosco de Maniwaki. We are glad to have you here. We also have with us Gaston Robitaille, Chairman of the Board for Mani-Jeunes.

Philippe Larivière, Coordinator, Centre Jean-Bosco de Maniwaki: I am going to speak in French because my French is much better than my English, but I will say thank you for letting us speak at this table. I would like to tell you about what is happening in our area with our people. I work with people who have a ``déficience intellectuelle,'' not in agriculture and forestry.

[Translation]

I am going to make a connection here between forestry and agriculture in the region and the social status of people who live with mental retardation, with whom I work every day. I listened carefully to the presentations, the questions and the answers given. If the forestry and agriculture industries have difficulty getting established, advancing and progressing, it is because at the social level, the poorest will also get poorer because they do not have access to jobs. They do not have the resources necessary to evolve socially. Recently, we took part in a few discussion forums where the subject was facilitating the integration of people who have a physical or intellectual disability. In companies, unions have standards that limit the integration of these people in the workforce. That does not help the situation of people with disabilities getting poorer.

The fact that these industries do not settle in the regions, and that we always have to depend on government subsidies is another factor in impoverishment. Often, the subsidies are not sufficient to meet the needs of people living with a disability. For example, to provide a caregiver for a family, the subsidy is $8.60 an hour, but how will you find someone who will take such a job, accompanying and taking care of someone for $8.60 an hour, when in the labour force, that person could earn $10 or $15 an hour? The choices are difficult for families and for individuals living with a disability.

My first observation is that even when there are subsidies, the financial resources are not sufficient for the families and for the people living with disabilities.

In terms of impoverishment, there are also eligibility criteria for equipment. Often, the evaluations required for these people to get access to equipment and to workplaces do not really take into account the person's ability to enter the labour force. Their access is limited. By limiting access to equipment, we limit their access to work. If someone wants to take advantage of a job opportunity, often they have to find the means within their own wallet and this equipment can be costly. So we are talking about indirect impoverishment once again, in the sense that the person must spend money or must find the funds in order to gain access to the job market.

Since I began my speech, I talked a lot about the financial aspect, but when we are talking about the social level, people who live with disabilities not only experience financial poverty, but also poverty in their quality of life. If you do not have access to the job market, to resources, you end up isolated, especially in rural regions where people have to travel long distances to get access to resources. That is one of the battle grounds of our organization. We are trying to ensure that people who come to us get the services necessary for their quality of life to be as pleasant as possible and that in the final analysis, they end up using fewer government services. When someone feels good about themselves, they have less need for medical services. So we have to avoid letting their quality of life deteriorate.

There was a project implemented regarding RRSPs to which families could have access. I think it was the federal government that implemented this policy in the fall. It was mentioned earlier. As I said, people with a disability cannot necessarily afford an RRSP because they are living under the poverty line. Occasionally, they must also spend money out of their pocket to get access to equipment and services which means they cannot afford to invest in RRSPs. Before governments adopt legislation or implement programs, it might be a good idea to evaluate how realistic they are.

There is a reduction in the quality of life in rural regions because we do not have the services to respond to all needs. For example, Paratransit is available in the morning and late afternoon. Someone who wants to work in the evening or at night would not have access to these services. We do not have the resources and services necessary to have access to these jobs.

Gaston Robitaille, Chairman, Board of Directors, Mani-Jeunes: My name is Gaston Robitaille. I am retired, like our former hockey player Mr. Mahovlich. I worked in the forestry sector for 35 years and since my retirement, I have been working a lot with young people. Mani-Jeunes is an organization that helps young people 12 to 17 years of age, most of whom come from under privileged backgrounds. Our five facilitators and director general do a lot of work surrounding addiction. We have training programs, help programs for youth, and we listen to what they have to say in cooperation with the schools in our communities.

I experienced the good years in forestry operations from the 1960s to 1990. I was in management, I counted the dollars the company brought in but now, it is harder to count them.

I would like to give you the history of poverty in our region. I will not give you a written presentation, but I will explain my own experience in order to raise your awareness of what happened between 1960 and 2000. During those years, forestry operations were huge in our region. There were a lot of jobs. Everybody worked for E.B. Eddy and CIP. From father to son and grandchildren, we contributed to the development of our region. Today, in the 2000s, the vision of young people from 12 to 17 is disastrous. They do not see any future for our region. They do not know where to go. It is difficult to see the differences between the 1960s and the 2000s.

What can we do to make you more aware of this? I would like you to travel along route 107, and see all the equipment for sale and how families in the region are discouraged. Back then, people went into the woods with a chainsaw. Today, we need investments of half a million dollars to a million dollars and there is no work the next day. So where will they go?

Young people do not want to work in forestry. That is too bad. The raw material here in our region is the forest. It is our life, be it deciduous or coniferous, we have plants, we are lucky. We have Louisiana Pacific, Bowater. I worked for CIP for 35 years and it is now Bowater today. With the changes in provincial policies, the years of forest concessions, there was a bit of abuse. Today, the pendulum swung the other way. The gentleman talked about the technical aspects earlier. Today, you cannot plan for a company. We would come up with strategic plans over 5 to 10 years. Today, forestry operations cannot make long-term plans. It is done on a day-to-day basis. We know that in the area of operations, you have to have 5 to 10-year plans if you want to succeed in a highly competitive market.

What can we do? First of all, governments could help us, starting with young people. Young people cannot go beyond high school here. After high school, what can they do? Leave for Hull, Ottawa or Montreal. More affluent families are able to send their children elsewhere. But for poorer families, what can a young person do? We see youngsters through 12 to 17 with potential and we wonder what they are going to do. We do not know.

I do not have a plan, but I think that the federal and provincial governments should contribute to the education of our young and develop programs to help them. Previously, the Harrington centre provided a lot of training for CIP and for many other companies. I could suggest that the federal government set up a forestry training centre that could help our young people.

What do we have as services? They are tourism services. That does not help people earn a living. If there is a plant nearby, there are services, that is very clear. But if we lose our lumber plants and our young people go elsewhere, what will happen to our region? Therefore, I think that the federal and provincial governments should put a training centre at our disposal.

[English]

The Chairman: Mr. Robitaille, Mr. Larivière must leave shortly. If you will allow us to interrupt you for a moment, we will allow him to answer a question and then we will get back to you.

[Translation]

Senator Segal: During the hearings we held in other parts of the country, the rural regions, people always talked about the problems of isolation and what happens to those who are disadvantaged in these regions. To me, there is clearly a significant link between isolation, the problem of intellectual disabilities among the young and the lack of money. In some regions of Europe, farm families are paid a guaranteed income for environmental services, simply because they live in a rural region. In your opinion, would that help a region like yours?

Mr. Larivière: It would be a good solution. In this region and in other regions of Canada, when you live with a person with a disability, you have difficult choices to make between remaining on the job or leaving your job, or taking part-time work. That leads to impoverishment. Having a guaranteed salary to take care of these people would be a good step forward to help them and support them and to eliminate isolation. There is no doubt that there is a lot of bureaucracy in social services, in terms of help for people experiencing difficulty. There are always endless assessments to be done. You end up waiting. You would have to spend money. Sometimes, you even have to call upon the private sector and spend money out-of-pocket given that we do not have the professional resources we need in the region. The fewer services there are available, the more families impoverish themselves and the more the person living with some difficulty becomes isolated and costs the system more money as well.

Senator Lavigne: Mr. Larivière, I do not know if you are familiar with an Montreal organization for the mentally- disabled called Lisette-Dupras.

Mr. Larivière: No.

Senator Lavigne: It is the largest organization for people with intellectual disabilities in south-western Montreal. I was part of the board of directors of this organization for 10 years. The Fondation Yvon-Lamarre, which is part of it, builds homes for people with intellectual disabilities and integrates them into everyday normal life. Within Lisette- Dupras, there are octopus-like agencies managed by a businessperson who receives a salary and who is subsidized by the provincial and federal government. For example, these companies have contracts with Air Canada to put headsets in sleeves. This kind of non-profit organization is subsidized initially and then it receives money to place their objects in bags and so forth. Another organization makes ski poles and snowboards. Of course there are instructors within the production facility, but this brings in a lot of money and subsidizes the enterprise. An individual like you who is retired can, with $20,000 a year as director, manage this business.

I think that if you had that kind of organization in your region, it would be beneficial. You could contact the companies under Lisette-Dupras and the Fondation Yvon Lamarre to see how they manage to help those people support themselves. Every day, people go to work and they have paratransit morning and night because they have jobs. Having sat on the board of directors, I know that this is empowering to them. How many people do you take care of?

Mr. Lavrivière: Right now, we have 25 people. With regard to programs such as the one you are describing, I can tell you that this year for the first time, we had a contract with the Maniwaki Health Centre to produce plans for operating rooms. The idea you put forward is very valuable and positive, but we are talking about large regions where there is a lot of industry. We had the service of putting headsets in bags for a while, but it did not last because we do not have enough resources here in the region to obtain long-term contracts.

Senator Lavigne: But you have Ottawa right next door, as well as Hull and Gatineau.

Mr. Larivière: These companies often deal with people who are nearby. There are services for people with disabilities in the Hull and Ottawa sector that already benefit from these organizations. I am saying that this idea is something that we already have in mind, getting contracts to get jobs, getting money other than just government subsidies. We are thinking about it. The problem is finding the resources to be able to set it up.

Right now, we have an expansion plan and some projects. We do a lot of clothing recycling at the centre and we put it on the market. We have expansion projects to produce fibre with products that cannot be used or resold. The projects are there, but it is finding the resources to put contracts like that in place. It is being considered.

Senator Lavigne: The Fondation Yvon-Lamarre now has 48 homes.

[English]

Mr. Larivière: Thank you for your time, and I apologize that I have to leave so quickly.

The Chairman: All the best to you and those whom you help.

[Translation]

Mr. Robitaille: I wanted to say something else about Mani-Jeunes. In 2005, we met about 10,000 young people at the centre with our facilitators. In 2006, about 7,000 young people showed up. That shows you how much these young people need help. They need us. They need action plans to succeed previous generations. That is our goal.

I would like to make another suggestion. I have a son who works in the field of corrections. We have a region here that might be able to do that. We are close to major centres. We are not far away. Ottawa is an hour and a half away. Why can the federal government not help us keep our young people in our regions? I understand that this is not a tertiary industry, but a correctional centre would help keep young people in our region.

So my two suggestions are a forestry training centre and a correctional centre in our region.

Senator Segal: With regard to your last suggestion, in the region I come from, Kingston, we have seven prisons, both federal and provincial, and that helps us enormously in terms of jobs. These are unionized jobs, either federal or provincial. They are well paid and they have benefits. You have a federal cabinet minister representing this region and I think pressure has to be exerted and I will help you with that. No problem. You talked about lack of hope and the lack of encouragement to go and find economical opportunities. But in analyzing your clientele, does it generally come from underprivileged families? Are there other problems?

Mr. Robitaille: As I said earlier, the majority comes from underprivileged families. Perhaps 80 per cent of them. With regard to education, things are quite difficult. In order to help them be in control of their life, our facilitators give them a lot of training. We try to equip our centre with computer systems to help them with their school work and so forth. But yes, without a doubt, this is a big problem among underprivileged families.

[English]

The Chairman: I notice that Ms. Lannigan was taking notes and I am quite sure they will go to Minister Cannon. Thank you very much for coming.

We have with us our next group of witnesses. This is our third panel today. We have with us Denise Julien, directrice générale, Centre des services aux réseaux d'entreprises du secteur forêt. We also have Jacques Grondin, the former union representative and employee of the local Domtar mill and he is here with us as an individual.

[Translation]

Denise Julien, Director General, Centre des services aux réseaux d'entreprises du secteur forêt: Madam Chairman, I did not come necessarily to talk about poverty, but about the wherewithal of people in our region. The topic I would like to discuss today is the case of the Regional County Municipality of Antoine-Labelle, because based on the analysis of that case, we can see ways to support local leadership and the capacity of regions to take control of their affairs and get organized.

The Regional County Municipality of Antoine-Labelle is part of the neighbouring region of the Laurentians. This is a territory of 15,000 square kilometres. Public forest occupies 85 per cent of the land. Therefore 15 per cent of the land is municipal territory, but public forests are also present in that territory. The RCM of Antoine-Labelle alone represents 73 per cent of the territory of the larger Laurentian region, but only 5 per cent of its population. In your documents, you state that with 150 people per square kilometre, one starts to ask questions. We have about 6 people per square kilometre on municipal land. If you look at the entire RCM, it is about 1 point something, so I do not know what you call that. We represent 35,000 people. There are 15 municipalities and in Mont-Laurier the population is 14,186 inhabitants. Our difference, and it is also the difference of the region of Maniwaki, is that we are in a region of transition between deciduous and boreal forests. So we have mostly mixed forest. This implies a different kind of forestry that is much more complex and expensive.

With regard to demographic characteristics, the population is aging, there is no doubt about it. The birth rate is low. There is an exodus of the young. Educational levels are low. There is a serious problem with dropout rates, especially for young men and there is also an extremely high unemployment rate.

The socio-economic characteristics are that the economy is based essentially on the exploitation and processing of wood substances and on recreation tourism related to hunting and fishing activities in particular.

This is an extremely resilient society. It was founded by the colonists of Curé Labelle. These are people who come from St-Jérôme and who settled in Mont-Laurier along the la Lièvre River and in l'Annonciation or along the Rouge River. Up until 1989, the public forest land was granted to two very large corporations, Maclaren and CIP. This was advantageous to the grantees because it meant virtually absolute control over the territory and guaranteed supply for Outaouais pulp and paper mills. At the time, pulp and paper mills were built along the St. Lawrence River because of the need for a water supply and the power of the river. We were foresters or lumberjacks, if you will, and the wood floated to Gatineau or Thurso. This system created obstacles to local development because harvesting deciduous wood or hardwood was seen as a liquidation of high quality wood over the long term. The grantees were only interested in softwood. Therefore hardwood was something to be got rid of. There were limits placed on the emergence of local forestry structures because there was no guarantee of supply. Therefore there could be no development. Access to public forest lands was prohibited. At the time, and that was not so very long ago, people remember that you had to ask the company for a pass in order to enter public forest in order to hunt or fish.

In 1986, the Quebec government reviewed its forestry management and adopted its Loi sur les forêts. It abolished concessions and implemented the CAAF. This is a very clear example of the fact that changing the rules can completely transform a community.

In 1978, we founded a forestry cooperative that had acquired some knowledge of the territory. The concession holders needed softwood with specific volumes. As it was in mixed wood territory, it offered many opportunities for processing other species. In its legislation, the government also provided that softwood had to be sawn before being processed into chips for pulp and paper mills. This gave rise to a new local industrial structure. Nearly $150 million were invested within 10 years in sawmills for softwood, hardwood, cedar, aspen, et cetera. About 1,000 jobs were created. All the various kinds of forestry work were consolidated because regardless of the automated technology, a whole new sector was created that included companies involved in silviculture, seedling production, and forest seeding. These companies were organized in networks. This is how the Centre des services aux réseaux d'entreprises du secteur forestier came into being. As individual companies were too small to afford all kinds of services, they pooled their resources, acquired a better knowledge of the territory, and developed new structures and new kinds of forest management with innovative experimental work on the ground.

In 1989, 27 per cent of the wood harvested on our territory was locally processed. Today, the figure is well above 70 per cent and there is a great increase in volume due to silviculture. In this way, the Antoine-Labelle MRC moved within 10 years from the seventh to the sixteenth place among the poorest MRCs in Quebec. This is the only circumstance where one is glad to see a drop in statistics.

Then, we had to coordinate the various uses of the same public territory involving forestry, recreational tourism, wildlife harvesting and so forth. It was a major challenge. Our uneasy coexistence had to give way to well-coordinated management. Here, we came to a dead end, not because we could not agree among ourselves, but because of the very high cost of implementing this kind of management. Currently, only the forestry sector can afford this kind of development. Our operational costs had risen substantially and the government's fee structures were not taking this into account. Thus, we ended up with very high stumpage fees as well as very high operational costs. The crisis came to a head in 2003. We faced this problem as we usually do, by trying to turn a challenge into an opportunity. We told the government that if nothing was done about this, three softwoods plants and the softwood head office would have to be shut down.

In a mixed wood forest, you have to deal with all the different kinds of timber stands. You have to cut hardwood as well as all kinds of other products. If you cannot market some of these products, you have to shut down the operation. So, there was a domino effect. Shutting down the sawmills meant shutting down everything else including plywood mills, lumbermills, et cetera, all crucial for our economy. The Kyoto Protocol, interesting as it might be, is not crucial.

We went to the government and we told them: ``Your stumpage fees make no sense. You are charging us much more than you should be according to your own rules because you have failed to take various factors into account.'' Thus, we got the government to help us out on a temporary basis. When a community is going through a crisis, it is extremely important for it to be able to provide documents and to find concrete ways of getting over the hump, and to rely on the government to fill the existing gaps in the forestry sector. Otherwise, you risk losing your entire industrial structure and community organization. Your best people may have to quit and your society is in shambles. Rebuilding our community would take a tremendous investment in time and money. A community with a good track record needs help in times of crisis, and the Quebec government has accepted to provide that help. We were glad to hear the government tell us that our specific problems could soon impact every part of Quebec. They gave us access to the substantial sum of $600,000 for a year. We were able to develop a common vision, a common language, tools for management and arbitration, and means for studying the economic impact on our territory. Your document shows all this. We were also able to determine what measures to take. We provided the government with documents that showed that they were charging us far too much, the government took this into account and we solved the problem.

A community can survive if it has the means to do so. We are in touch with former concession holders, but we have neither the clout nor the capital that the concession holders had and we are not on the stock market. We are merely SMEs. We sometimes do not have the means to invest in stabilizing our situation. The failure to support our work can bring about great losses and small gains. In my opinion, support for developing communities is always an investment. It is not an expenditure.

We are currently facing a major crisis. The work done in public forests by the Antoine-Labelle MRC brings in $140,000 in added value each year. This means 2,000 jobs. The Canadian government takes in $41 million in tax revenue and the Quebec government takes in $47 million. I strongly believe that out of the $41 and $47 million that they get, they could set aside $300,000 or $400,000 to help mobilize our people.

The crisis has cost us 1,500 jobs and things could get worse because the market is slow. The SMEs as well as the big companies will have to shut down because they are constantly losing money. We cannot go on working like this. The industrial structure that we built is in jeopardy. If nothing is done, a part of the active population of our region will leave, and the exodus has already begun. People can find work in other sectors. There is a great affinity between the forestry sector and the construction industry. These are skilled workers who can operate heavy machinery. These workers are very intelligent and hard-working. Thus, the possibility exists. I was told that there are 15 per cent more forestry entrepreneurs in Quebec now than there were two years ago.

Another serious problem for us is that our best qualified workers are leaving for Alberta and Manitoba where jobs are plentiful. There is a migration of qualified manpower as well as a part of our forestry machinery. This is a very serious problem because in the forestry sector, forestry machinery is owned by individuals. Forestry is perhaps the only sector in which the supply of equipment is owned either by small companies or by individuals. The machines are worth $500,000 or $600,000. The owners get no support from government at all.

Our communities risk becoming more reliant on social assistance. We must look at the opportunities and the possible restructuring so that government can be of help, both to individuals and to companies. We think that the forestry sector provides many new opportunities. This crisis will not be permanent. We must change with the times. We must learn new ways of doing things. Up to now, the forestry industry has mainly focused on production. It must take a greater interest in its clientele. It must find new outlets. However, in order to do this, the communities and small and medium-sized companies must have access to knowledge and expertise. We have done this through our innovation and operational experimentation network. We are working with the FERIC, Forintec and the Canadian Forest Service. Researchers in Quebec are working together with researchers in other parts of Canada. It is a considerable task, but it is rewarding and worthwhile. In this way, we can advance more quickly toward profitable solutions. This is no hogwash, it is dynamic work that builds up our companies.

What can government do for communities? There are problems with infrastructure: highway infrastructure, railway infrastructure and communication infrastructure. Many municipalities have Internet, but the connections are as slow as cold molasses and practically useless. This drives people away from our region. Companies cannot do business in places that lack proper communication systems. Big companies like Bell Canada tell us: ``You are too small, we are not interested because you are not profitable.'' This makes things even more complicated for us.

We must create conditions that are favourable to local development. The Kyoto Protocol is creating opportunities right now. I do not mean to say that I favour the Kyoto Protocol, but the current fight to reduce greenhouse gas is creating opportunities for using biomass to produce energy, for exploiting renewable resources and all kinds of things like that.

Government has a role in opening new markets, providing incentives and promoting wood as a renewable resource. When this was done in Europe, new markets were opened up. Do not worry, as soon as there is a market, companies will move in. Government has a role to play in promoting wood products.

Quebec and a many parts of Canada, the Maritimes, Quebec, Ontario, all the way to British Columbia, have great forestry resources but currently we are not showing our awareness of this fact. Environmental concerns provide an opportunity to bring forestry into the green energy sector as a major stakeholder in meeting the Kyoto objectives because we can produce material that is good for the environment.

Programs like employment insurance are not suited to crisis situations. In a crisis like the current one, the professional seasonal forestry worker cannot be blamed if reforestation cannot be done under the snow or if operations have to stop from March to June because there is too much mud in the woods. Our profession has to follow seasonal cycles. If a company does not work continuously, our professionals exhaust their employment insurance, then they sell their skidoos, their four-wheelers, their houses and anything else of value before resorting to welfare. This also encourages them to leave.

Nothing has been done to solve the temporary crisis. It is very important to do something to maintain our structures. Government must accept to share the risks with communities, entrepreneurs and companies. When, in a crisis situation, government tells them that it is ready to help them out with their cash flow while at the same time it expects them to perform just like other sectors, if they are expected to meet absolutely impossible conditions, it is of no help to them at all. They are saddled with even greater burdens and when they resume their work, they have further problems because they have spent their capital.

Government must review the promptness of its intervention in crisis situations. Bell Canada used to have an ad that said that sometimes it can take time. For us, it is taking time. A crisis comes up suddenly but the reaction takes too much time. Crises like the current one are not a common occurrence. Therefore, it is important to negotiate with the communities because the same solution cannot be applied everywhere.

Communities also need support with their internal organization. Decisions must respond to conditions on the ground. The people know that there are opportunities for development, but they need to create strategies and a common language. They need to have access to knowledge. Most communities have no university or CEGEP. Those institutions are far away, therefore we must create networks.

The doctrine of subsidiarity needs to be emphasized, which means that decisions must be made as close to the ground as possible.

In general, I wanted to tell you that rural communities hold great interest. The work to develop expertise on the ground has yielded extraordinary results. We have attracted researchers to come and work with us.

Constantly changing programs create difficulties. We always need some help to finish our work. There was a time when I felt that I was benefiting from a program; the program was useful for development until it changed. The lack of continuity on either side is extremely destabilizing and creates difficulties.

Jacques Grondin, as an individual: Madam Chairman, my name is Jacques Grondin, and I used to work for Domtar at the Grand-Remous sawmill.

On June 20, 2006, the mill closed down permanently. The shutdown was due to several factors, but especially due to a 20 per cent reduction in contracts for supplying raw materials. This reduction resulted in reducing the working time by eight weeks per year, which increased production costs. When the mill closed down, the Canadian dollar was worth 85 American cents and today it is worth around 94 American cents.

Since 2005, construction starts in the United States have gone down by 30 per cent and finished product prices have consequently fallen. The current price is around 240, 250 per thousand. Basically, we must keep in mind that the softwood agreement also has an impact on the volume that we can sell to the United States and on taxes. This is why about 100 workers lost their jobs. Some of them had more than 25 years of service. The average age of workers at the Grand-Remous mill is about 40 years. About 15 of them are over 55 years old. Most of them have little formal schooling and have always worked in sawmills, therefore it is difficult for them to find new careers. Some of them, I would say no more than about 15, did find new jobs. The others are receiving employment insurance benefits. However, about 30 workers had no more benefits as of last April 5 and the others will no longer have them in mid-July. I presume that some of them will resort to welfare.

The employees have to go back to school and consider new directions. This involve passing make-up exams. As some of them have not been to school for the past 30 or 35 years, they have to go back to Grade 8, 9 or 10. It may be difficult for them to graduate from high school because, as I said, many of them left school many years ago. Therefore, things are not as easy for them. Those who already have a diploma went for a vocational diploma, but nevertheless there are limits and conditions. For example, 39 of us attended an information session for a course for driving heavy trucks but the course would only admit 16 students. Besides, those of us who had already graduated from high school, were caught in a vicious circle, because the crisis in the forestry industry also has an impact on other areas of business by reducing the demand for manpower. Consequently, there are fewer available jobs in the region.

The situation is even more complicated for employees who are over 55 years old. In general, they are not high school graduates. They must first finish high school, which may take months and even years. Then they must go for a vocational diploma because you have to have at least that kind of diploma nowadays to get a job. That takes an extra year. Thus, the people who start their studies at the age of 55, finish them at the age of 58 or 59 and employers are all the more reluctant to hire them given the fact that they have no experience in the field. This also applies to younger workers.

It is important to note that while workers are finishing school, they have no income. They have to live on their employment insurance benefits that eventually run out. We should find suitable solutions for workers who are in their 40s or 50s, by requiring less schooling. For instance, we should have training classes with courses adapted to our needs and we should not have to sit down in regular classes with 15 or 16-year-olds. There should be programs that recognize acquired experience and that would be equivalent to vocational programs or other programs. In this way, training time could be shortened so that more people could stay and successfully finish their studies.

Also, industrial entrepreneurs who want to set up business need qualified and competent personnel. They have great difficulty in obtaining training programs that really meet their needs.

Moreover, the lack of money due to losing one's job is a constant source of stress and low self-esteem for workers, because these people have worked since they were 16, 17 or 18 years old. As they have invested in the forestry industry ever since they were teenagers, they end up without any opportunities, without experience, and in many cases, without schooling. As their future is in jeopardy, the stress that many workers have to endure has resulted in quite a few cases of depression.

Besides, Grand-Remous is a one-industry village at the extreme fringe of the Outaouais region. Therefore, this village is vulnerable to other companies who want to grab the wood supply contract without considering the impact on the municipality. Domtar wants the supply contract. If they do not get it, they will not build another mill at Grand- Remous.

In conclusion, the closure of the Domtar mill in Grand-Remous affects 120 direct jobs and many indirect jobs for which I have no figures, like jobs in the forest, truckers, entrepreneurs and business persons. Thus, many families have seen a great drop in their standard of living that might even drive them into exile to large urban centres.

[English]

Senator Mahovlich: It certainly sounds like we have a crisis on our hands.

Does the warming effect that the world is experiencing right now having an effect on the forests that we have up here in the north, like the boreal forest? Do you find that there is a change? You mentioned Kyoto.

[Translation]

Ms. Julien: Presently, the impact on mixed wood and hardwood forests is not as obvious as it could be on boreal forests. In our opinion, the greatest impact is due to rainfall. Currently, the rainfall is steady and favourable. There is an obvious impact on wildlife. There is an increase in the number of deer, and animals are migrating northward. Unlike trees, animals can move around. We can expect the growing season to be a bit longer. The Mont-Laurier region has good sunshine and excellent rainfall. Therefore, for the time being, the impact has not been significant. We have not been infested with insects as other regions have been.

[English]

Senator Mahovlich: In the 1950s and 1960s, we were doing quite well. We were enjoying life and we were experiencing success. Did anyone think there would ever be a crisis? Did anyone prepare for a crisis? Should we have enticed more incentive to our communities up North?

I come from the little town of Timmins and it is doing quite well. It is a mining community and it has a forestry industry. Timmins seems to have attracted a few other commercial businesses; it seems to be doing quite well. They have increased their population to 30,000 or 35,000 people. I see there has been a small decrease in population in this area.

[Translation]

Ms. Julien: The active population is declining but on the other hand, the overall population for the Antoine-Labelle MRC is steady. We are worried about the active population, with an exodus of young people and an influx of retirees. We are near Montreal. Many people are moving in and changing their cottages into residences. Retirees do not need much economic development and would rather have things remain as they are.

There are 35,000 people on our territory of 5,000 square kilometres; the population is sparse. The biggest town is Mont-Laurier with 14,000 people. The current crisis does not seem fatal for us because the companies that we have built are performing well. We have made great investments during recent years. Our problem has to do with repositioning. We have to weather this crisis. We think that with proper support, as Mr. Grondin just said, there can be repositioning and a new start. Our situation is not at all desperate, quite the contrary. We have several projects that favour repositioning. But as I just said, we are often short of resources.

[English]

Senator Mahovlich: Have we had any new immigration come to this area? I know immigrants seem to be attracted to cities probably because their families live in the cities. In the 1940s and 1950s, immigrants used to go to the rural areas. Now, they do not maybe because of the lack of jobs.

If we found incentives for immigrants to come to areas like this, do you think it would help?

Youth seem to leave. I know in Northern Ontario, all my schoolmates with whom I grew up have all left and gone elsewhere. New families move up North. There is a turnover in rural areas. I imagine it is similar to this area. People move out, but we have to find incentives to attract more immigrants to the rural areas. Can you comment on that?

[Translation]

Ms. Julien: It is a new phenomenon. The mayor of Mont-Laurier is of Haitian origin. In forestry, there are more and more immigrants from Eastern Europe and Africa. They are extremely good workers. There are two things we are interested in. First, something has to be done because these people arrive in an environment where they are culturally isolated. In the city, there are actual neighbourhoods and communities. There are newspapers. There is a cultural life for those communities. When they come to Mont-Laurier, there is cultural isolation. There are definitely measures which could be taken to help people fit in better. The other thing is fostering ties between rural and aboriginal communities; the aboriginal communities do want to get into the job market, and there are a lot of young people in those communities. Manawan, a community outside our region, is an influential territory in the Laurentians that wants to get into the forestry industry. That is seen as an extraordinary opportunity. They came to the vocational training centre and they are really efficient. Those are definitely two avenues to be pursued and explored. However, if you are going to keep or attract people, I think you have to have jobs for them.

[English]

Senator Mahovlich: Mr. Grondin, when the mill closed, there were certain workers who were 55 years of age and over. That is getting near retirement age. Did they have a pension to fall back on? Was it a good pension that they could fall back on to help them out?

[Translation]

Mr. Grondin: No. Back then, about 10 years ago, there was a pension fund system. It is not generous enough for people to retire at 55. At about the same time, there was a federal government program called ``POWA.'' It is gone now. There is currently another program, which pays out around $800 a month. Clearly, when you are 55, $800 a month is not enough to contemplate retiring.

Senator Segal: I saw an automatic link between the two presentations.

Ms. Julien, you talked about strategic bridges to help a community reorganize and take charge, and to find ways to facilitate some economic development in a crisis situation.

Mr. Grondin, I heard that a staffing bridge was lacking. Those who are laid off have no other option.

Ms. Julien, under the Quebec program called ``Programme de la ruralité nationale,'' there is some presence in the community, some grants. Federally, we do not have a program that is totally dedicated to rural economic development. Without creating a new program today, what lessons can the federal government learn from your experience in your region in order to do something truly positive to help communities like yours make the transition? Does it involve issues of tax, grants and having a guaranteed personal income level for everyone? In your opinion, based on your experience, what is the best way for the federal government to create a presence that would be instrumental and positive in helping our rural communities develop and protect themselves?

Ms. Julien: When you say strategic bridges, that means businesses, communities and individuals have to be involved. Trained and skilled individuals like workers at the Grand-Remous sawmill, for example, if the crisis comes to an end and they are gone, it becomes extremely difficult for companies to keep going. Yes, it definitely involves taxation. As far as forestry is concerned, I think you have already heard some suggestions. Among other things, when it comes to forestry machinery, if there were an accelerated capital cost allowance like in the case of business equipment, that would definitely help the owners of that machinery.

The federal government has a program that is limited to pilot projects, one per province, and that is Natural Resources Canada's forest communities program. We applied under that program. The title of our project is ``Le Bourdon'' [The bumblebee]. We called it that because a bumblebee is an insect that, according to all the laws of physics, should not fly. But because it does not know that, it flies. So, according to all the laws of socio-economics, we should die, but because we do not know that, we are going to survive.

I think that Farm Credit Canada should broaden its criteria for intervention when it comes to single-industry communities with industries that have the potential to make it through the crisis. If there were a greater openness, that would be a good start, but they have criteria, they have short- and medium-term profitability concerns. That is where the bridge is missing.

The good thing about your forest community's program is that it supports a community partnership strategy for development, but also for knowledge acquisition and joint strategy development. It is holistic. There is what we can do with infrastructure and what you can do with infrastructure. There is what you can do to boost new markets as I mentioned before. There is what we can do with investment and what we can do for individuals. It is the entire package. It has to be done by asking communities how they look to their future. Each community has its own dynamics, leaders and ways of doing things. There is also a culture. That is why programs have to be flexible.

Senator Segal: Your organization focuses on forest resources, but generally, has the community sought, for example, decentralization of part of a federal department so as to have an office with a lot of jobs in your region? Has the community tried to get a share of good federal jobs or not so much?

Ms. Julien: Our community, with the laboratory project, has managed to bring people together and promote a vision of community development based on all of the natural resources. This community has managed to define a proposal in connection with the Laurentians region to set up a natural resources and land-use commission in the Laurentians. That is decentralization of some of the land management powers toward communities. So there is a desire to bring decision-making closer to the local level. We are not saying that government should not be setting the broad goals and guidelines that regulate and organize activities. The way to make things happen is to trust people by making them responsible and accountable for the goals that have been set.

Provincially, that is something that people are currently seeking. Federally, no, there has not been any effort made. But one place where federal assistance would really help us is with highway 107, which is a cross-Canada highway; there are some really serious problems, especially in the northern part. If the federal government does anything, it is important to do it at the community level. It is important to act within the community environment. Among other things, there is the whole issue of communications; I think the federal government should see to it that small communities have access to quality communications. Where we are, we only get channel 2, we do not even get Télé- Québec. When television is boring, nobody watches it. But equipment is very expensive. Everything is expensive when you are isolated, and that is the problem. The Internet is a work tool. If people do not have Internet access, that causes major difficulties.

Senator Segal: Mr. Grondin, you talked about how hard it is for people who have lost their job to rebuild their lives. Of the group of people you worked with back then, have many left the region? Have they found an opportunity to start up a small- or medium-sized business? What have they done in general?

Mr. Grondin: As I said before, around 15 of them found a new job. That does not necessarily mean it is a job at the same level. There is one person who works 24 hours a week for minimum wages and supplies his own vehicle and gas. We have no choice. Sooner or later, you have to do something else. A few of them found work that was reasonable enough. But not more than 15 or so. The rest are kind of struggling with going to school. There are even problems with sending them to school because you have to meet certain Emploi Québec criteria. If you do not meet those, you are eliminated. It is straight to welfare and your self-esteem suffers. These are people who have been working since they were 16, 17 or 18. They have always worked and they wind up on welfare. As Ms. Julien said earlier, you have to sell your skidoo, all-terrain vehicle and house before you can get welfare. So you wind up with absolutely nothing.

Senator Segal: In terms of social problems, without mentioning private issues, family problems, divorce, have you heard that the situation was more difficult after the plant closed down?

Mr. Grondin: No, not really. Under the Labour Code, when a plant shuts down, there is an adjustment committee. While the adjustment committee was still around, we were getting information on our people, but that committee disappeared about five or six months ago. So we have kind of lost track of our people. From time to time, we get a call, from people looking for news, wanting to find out whether there is anything else coming to Grand-Remous, but that is all.

Senator Lavigne: Ms. Julien, you mentioned stabilization of training programs. Are there any specific programs that should be stabilized in order to help you provide adequate forestry training?

Ms. Julien: Yes. The problem is the criteria or the ratio. Jacques was saying earlier that there were 39 people interested in taking the course and that only 16 of them were eligible. The opposite is true. In other words, often, in a rural area, there may be 5 or 6 people who need training, but no training will be provided unless you have at least 15 people. That is a specific training problem.

Senator Lavigne: With regard to the number of people who meet the criteria.

Ms. Julien: With regard to the number of people and the support for the training institution to provide programs.

Senator Lavigne: You also talked about green energy forestry to help meet the Kyoto objectives. Is that not already considered like a renewal energy within Kyoto?

Ms. Julien: Yes, that might be. It is considered as green energy. However, if we really want to use forest biomass to make biodiesel or help heat homes in an eco-friendly way, then that will require government policy to foster its use, on the one hand. On the other, incentives are needed for rapid growth. You can wait until things happen — which can take a very long time — or you can foster the use of forestry biomass for such purposes. We know today that using corn or other crops to produce biodiesel is somewhat at odds with the agricultural use of those same productions. In regions such as ours, there is a vast quantity of available forest biomass. There are many things at our disposal. This means that government policy has to recognize that these things will help achieve greenhouse gas reduction targets and that support is needed for this emerging sector.

[English]

The Chairman: Thank you very much both of you for a very interesting and important presentation. Denise, your words about the necessity of bringing our Aboriginal community as much as we can into these industries touched me. I wish you every success in that endeavour.

We are on our fourth panel. I am very pleased to welcome Dorothée St-Marseilles, Coordinator of l'Équipe des bénévoles de la Haute-Gatineau, and Benoit Labrecque, Advisor, Development of Forestry Industry, Centre local de développement.

[Translation]

Dorothy St-Marseille, Coordinator, L'Équipe des bénévoles de la Haute-Gatineau: I am the Director of L'Équipe des bénévoles de la Haute-Gatineau, which is a home support organization that provides transportation services for medical reasons. The organization was founded in 1983. Its mission is to help senior citizens and financially- disadvantaged people to go to their medical appointments, whether in clinics or hospitals. Our service is only offered to people aged 55 and over, as well as to people on income security and welfare. We serve Maniwaki and its neighbouring municipalities, Grand-Remous, Montcerf, Lytton, Bois-Franc, Egan-sud, Déléage, Aumond, Ste-Thérèse de Gatineau, Messines and Farley.

From April 2006 to March 31, 2007, we made 2,300 trips in that fiscal year. Our service is provided by seven volunteers who are available seven days a week. Destinations include Hull, Gatineau, Ottawa, Mont-Laurier, St- Jérôme and Montreal, in addition to local appointments. People are picked up at home, driven to their medical appointment and brought back home afterwards.

We see the problems that poverty creates in our region. We live away from the major centres, and many have no longer the money to buy an automobile. In most cases, their children have left the area to go study or find work. These people therefore live alone and do not have means of transportation. In order to take care of our seniors' well-being, we have to provide them with a transportation service especially when their health is at issue, given that health specialists practice in major centres. Many go to Gatineau or Ottawa for chemo therapy, dialysis and day surgery, and often to Montreal for orthopaedics.

In conclusion, organizations such as ours are meant to help people have a certain quality of life, live in their own region and have enough to be comfortable. I want to say how important our community groups are in the region, because they care for the well-being of an increasingly aging and poor population.

That is our goal: taking care of poor people who do not have adequate means.

Benoit Labrecque, Advisor, Development of Forestry Industry, Centre local du développement: Madam Chairman, I was asked to speak about the Gatineau Valley region. This was a request from the office of member Lawrence Cannon. I will basically give you a socio-economic overview of the region.

I would like to point out that this is not my field of expertise. I was trained as a forestry engineer, and my main areas of expertise are the forest-based economy and business management. I therefore apologize for any inconsistencies in my presentation. I would like to say a few words about the Centre local de développement. Initially, this organization was founded by the Government of Quebec to help the regions, especially the RCMs, develop socio-economically. We support both business start-ups and cultural and social groups. Our centre allocates grants, helps applicants obtain funding and coordinates start-up projects in both the private and non-profit sectors. That said, I will also touch on the forest industry, which is my field of interest, but my presentation will be quite similar to what you have heard since this morning, especially by Ms. Julien, who gave an overview similar to the one of our industry in the Outaouais.

I would like to start with a few statistics on the area. There are 20,000 people living in the Vallée de la Gatineau RCM, or 5.8 per cent of the Outaouais population. The region is quite vast and has the occupancy rate of 1.6 persons per square kilometre. We have a relatively aging population, with an average age of approximately 43 years. Our residents are quite poor, especially when measured by people's dependency on government benefits, which amount to 47.5 per cent of household incomes in the region. That is an average based on total wages paid in the region and accounts for almost 50 per cent of wages earned.

The labour force participation rate, which is different from the unemployment rate, is approximately 68 per cent for people aged 15 to 64, which is relatively low when compared with areas like the City of Gatineau, which has a rate of close to 80 per cent.

The population has been declining since 1996. In fact, the number of residents dropped by 1.7 per cent in 2006. Nevertheless, the long-term outlook is still quite good. Between now and 2010, a 20 per cent growth is expected, mainly owing to the migration seen in the Hautes Laurentides sector. On our side, people will probably migrate from the Gatineau-Ottawa area. The number of baby-boomers is increasing. The Vallée de la Gatineau is a playground for that segment of the population. Many cottages are converted into residential homes, and the expected increase should exceed that of the aging population.

The average income for people in the Vallée is approximately $21,000, with disposal income reaching between $16,000 and $17,000. Our people are aging. Between 2000 and 2006, the number of people receiving both provincial and federal old age benefits has increased by 4 per cent, from 49 per cent to close to 53 per cent.

This is an under-privileged area. That was made clear by the amount of disposal income, $16,000. As well, that can also be seen in the number of low-income families. The region's average is higher than that of Quebec as a whole. The rate in Quebec is approximately 10 per cent, which is similar to that in the Outaouais overall. In the Vallée de la Gatineau, some 17 per cent of families live on low incomes. These low-income families are mostly made up of women, which is a rather common finding to all regions when addressing poverty-related issues.

One final statistics on poverty: Unlike our neighbouring region, the Hautes Laurentides, life in the Valley has deteriorated since 2000 or 2001, according to the latest census. Today, the medium family income is approximately $38,700, which places us second to last of all RCMs in Quebec. We are at the bottom of the pack. That covers the information I wanted to give you on the community.

I will briefly talk about the forestry industry, which is my field of expertise. The forest lands of the Vallée cover some 2 million hectares of productive forests. A quarter of that land is made of pure coniferous woods, especially Nordic species, including fir, spruce, larch and jack pine; 36 per cent is mixed forest and 39 per cent, deciduous forest. As Ms. Julien said when she presented the Mont-Laurier sector, these forests are extremely hard and very expensive to organize. Our legacy is the same as that of the Mont-Laurier sector, i.e., we are in the heart of former CIP lands. Ours is a costly legacy of a degraded forest that is expensive to organize.

Our forestry is dominated by major multinational companies, including Louisiana Pacific and Bowater, which are currently the principal managers of our forests. Commonwealth Plywood is another major player in the forest industry. Its head office is in Sainte-Thérèse, a suburb of Montreal.

The Outaouais can produce approximately 3.8 million cubic metres, all species combined. That was the forestry capability for 2000 to 2008. For 2008 to 2013, the new chief forester has estimated that capability at 2.6 million cubic metres, all species combined, which amounts to a significant decline for the Outaouais region overall (32.1 per cent). That is a substantial drop. In fact, decreases will vary between 21.3 per cent and 62 per cent depending on the species. The Nordic species used at the Bowater plant here in Maniwaki will decrease by 21.3 per cent, and those used at the Louisiana Pacific plant will drop by approximately 40 per cent.

In 2000, there were 20 primary processing plants in the Outaouais, including sawmills, panel board plants and pulp and paper mills. In 2007, or seven years later, there are but 13 of those plants left. The same can be said for the Vallée de la Gatineau. In 2000, there were eight processing plants. In 2007, only four remain, including one — and I heard this morning — that will shut down shortly, leading to significant job losses.

In the Vallée alone, we have gone from 2,593 direct and indirect jobs related to the forest — including jobs in the forest per say — to about 1,500 jobs today, and that number could decrease in the long-term.

The economic losses for the Outaouais region have been estimated at approximately $110 million. Forty-four million dollars of this amount have a direct impact on the Vallée. We are referring here particularly to salaries that will no longer be paid on an annual basis.

As I said, there are also potential future losses because of the crisis in the forestry sector. This crisis, contrary to what Ms. Julien may have told you, has to do with both economic and structural considerations, in our opinion. There has been a drop in the demand for products of the pulp and paper industry because of pressure from the information technology sector. The Outaouais region, with its four pulp and paper plants, has been directly affected by the drop in demand, which is a very discouraging trend for the long-term. Major change will be required in the Outaouais region if this activity is to be maintained.

In the case of lumber, the problem is much more economic than structural in nature. Reduced opportunities will have a major impact and the result should be a consolidation of the industry. We do not really know what the consequences of consolidation will be for the Gatineau Vallée.

This concludes my remarks, and I would like to thank you for your attention.

Senator Segal: Before I ask Ms. St-Marseille a question, I would like to offer my personal thanks to you and your colleagues who work in this exceptional service. We may talk about major government policies or whatever, but in everyday life, it is the work of volunteers like you and your colleagues that really matters in the lives of our seniors and others. As a citizen, I would like to thank you for your work.

Tell me about your funding arrangements. Gas prices have gone up. Do the volunteers who drive people to their medical appointments pay for their gas? How do you work this?

Ms. St-Marseille: We come under the Agence de santé et des services sociaux de l'Outaouais, and it provides our funding. Some individuals also make donations for transportation services. Volunteers receive a certain amount per kilometre.

Senator Segal: So a person has to have a vehicle in order to be a volunteer. Is that correct?

Ms. St-Marseille: Yes, they use their own vehicle.

Senator Segal: Does this type of activity have any impact on insurance?

Ms. St-Marseille: They are not taxis. These people are volunteers. They are legally allowed to do this. Of course, Transport Quebec does check on things. The transportation service has to be reserved 24 hours ahead of time. If we get a telephone call for a ride on the same day, we cannot do that, so as not to compete with taxis.

Senator Segal: If someone is driven from one region to another for a medical appointment, and if the individual has to wait an hour or two, does the volunteer wait as well? Does the volunteer have to wait until the appointment is over to bring the person back home?

Ms. St-Marseille: When a person calls for a ride, he or she already has an appointment. It may be in Hull, Gatineau, Ottawa or Montreal, to see specialists. The volunteers pick up people at their homes, drive them to their appointments and wait for them. That is part of the service.

Senator Segal: Without violating confidentiality, I imagine that the volunteers report to you about what they see in some homes, where there are some rather difficult situations. Can you tell us about some of these experiences volunteers have shared with you?

Ms. St-Marseille: We deal with people who are on income security and welfare. Some of them do not even have a dollar to buy a coffee. So the volunteer often has to pay out of his or her own pocket. Wait times are long, and so is the trip. This is what they tell us, but they do not put a claim in for this. Reimbursement is for the volunteers' meal, for the lunch, because they are away the entire day, but if there are other expenses, they willingly pay for them. Most of them are very available and generous. We have good people.

Senator Segal: Is it difficult to find volunteers, to recruit enough volunteers?

Ms. St-Marseille: We have seven. We did have a few more, but our criteria changed; we are requiring the vehicles to be under six years old for safety reasons. We said that it would be better if they either changed vehicles or dropped out. Some did not want to change their vehicle. But we do have seven and they are available.

Many people are on welfare in Maniwaki. We pick them up and bring them to their appointment at the clinic or hospital. As I said, we took 2,300 trips.

Senator Segal: That is an incredible number.

Ms. St-Marseille: It is horrific; we do an average of about 200 per month.

Senator Segal: Do the requests for transportation come through the churches or other social organizations?

Ms. St-Marseille: The CLSCs and seniors' homes call us. We are well known because our organization has been around for 25 years. Word gets around. We do not do much advertising. The hospitals know we exist. We also have an agreement with the local Employment Centre with respect to mileage reimbursement, so that these people can get to their appointments.

Senator Segal: Mr. Labrecque, as regards economic strategies, you discussed the problems in the region. You talked about plants that had or were about to shut down. You mentioned the crisis, which is both structural and conjunctural. In your opinion, what is the best way that the federal government can help the region pragmatically, in order to decrease rural poverty and increase economic opportunities?

If you could write the next Speech from the Throne, what would be your first suggestion, regardless of whether a Tory or a Grit government is in power?

Mr. Labrecque: I would like to provide you with a short update that I intended to give you at the end of my presentation, but I realize that I had neglected to do so. There is currently an initiative underway in the region to change the economic structure. Moreover, I came to the region because of this desire to diversify the economy. The economy of the la Vallée is in transition. We have already begun. There are already a half-dozen secondary and tertiary processing projects that are passed the start-up stage, that are in production or pre-production phases. We could say that there will be a change and the importance of primary processing will decline.

As for this Speech from the Throne, obviously start-up assistance for businesses would be one of the priorities. This could come in different forms, as a type of subsidy or tax holiday for start-ups, particularly in extremely sensitive sectors, such as bio-diesel, ethanol, what we call the bio-refineries, plants that produce heat, electricity and various chemicals and, finally, pulp and paper. This type of thing will be essential for the forest sector in the future. The unfortunate thing that is occurring in Quebec in particular, and I believe also in Canada, is that we have put very little effort into developing alternative products in the pulp and paper sector. We have focused a great deal on printing products. I am referring primarily to newsprint and printing paper for office printers. We have done very little to create products for the nanotechnologies. In certain sectors, research and technology are very advanced. We have literally left this up to the Americans or Scandinavians.

Increasing research budgets for these sectors would be the second measure that I would put in a budget.

Senator Segal: Could you clarify whether it is the way we manufacture the paper that is a problem or is it the paper product that we chose to make that constitutes the problem?

Mr. Labrecque: Paper production technologies are not my specialty. From what I can gather, it is a bit of both. The technologies are obsolete and, at the same time, there is a problem with what is done with the fibre that is removed once the paper has been defibrated, because this is a two-step process. The wood is defibrated and then reconstructed as paper sheets. We do have existing technologies that have not necessarily been integrated into these two processes.

The concept of bio-refineries is probably the concept of the future for the pulp and paper sector because it enables us to integrate energy production. We talk about calories or kilowatts per hour. At the same time, the production of other goods has, to some extent, shifted the cycles in accordance with the traditional paper cycles or forest product cycles. So we are keeping paper production and we can also produce high-technology products.

I read some documents about product assembly, particularly paper assembly, which could be used as antiseptics. They could be used as a barrier against infections. This is very high technology based on wood fibres. I am referring strictly to the pulp and paper sector here. But we can look at the entire construction industry in Canada, in general, and in Quebec in particular. Mr. Szaraz, Mr. Dansereau and Ms. Julien have mentioned this possibility. We could have a policy requiring architects and designers to use wood in institutional and residential construction. Wood is used a great deal in residential construction, but not much is used in institutional or commercial construction. We have products that are better to use than concrete and steel. We could also give some thought to developing a process or construction system that would enable us to combine the use of concrete, steel and wood, which would lead to more requirements for these materials.

The main result would be that the sawmill sector would no longer focus exclusively on producing commodities, but would also make value-added products, which is not really an incentive right now.

So the two areas that I would focus on in a future budget would be assistance for business start-ups in the form of subsidies or tax holidays and increased research budgets.

Senator Harb: Thank you very much for your presentations Benoit and Dorothy. Your organization is very interesting. Do you receive any provincial or federal subsidies and, if so, how much?

Ms. St-Marseille: Yes, we receive subsidies from the Agence de la régie de la santé. It depends on the budget estimates that are done every year. They assess our requirements. Our mandate is to provide the service. The money is really used to reimburse our volunteers for their mileage, their meals. Most of the subsidy we receive is used for that purpose.

Senator Harb: The fact that you make 2,300 trips per year is very interesting. At what time of the year do you make most of these trips? Are there some seasons that are busier?

Ms. St-Marseille: It is throughout the year. We do not have a time when we stop. We are always open, we have volunteers available seven days a week.

Senator Harb: The provincial government has just announced a national policy with regard to rural Quebec. Are you familiar with that policy?

Ms. St-Marseille: I am a counsellor at Aumond and there are a lot of issues that come up in our correspondence. There are many things sometimes that we are familiar with superficially, but not in depth.

Senator Harb: They announced a budget of $220 million. It is called Solidarité rurale du Québec over seven years. If you read what they intend to do and what they are doing, I think there are opportunities there where you could participate.

My last question is about what we call indicators. For instance, in the past three years, do you consider that a lot of people have used your service?

Ms. St-Marseille: Yes, there are more and more. As I said, our population is aging and for our young people, it is normal that they go and study in a CEGEP or university in Hull, Gatineau, Ottawa or even Montreal. There is no doubt that people are ending up alone when they are aging. I did not bring with me a full set of statistics, but we have people who are 95 years old who use our services. There could be people who are 40 and 30 and who receive welfare to whom we provide services. Increasingly, the average age is 45 and over in our region.

Senator Harb: Senator Segal asked Benoit to tell us if he was king, what would he do. If you were queen, what is the first thing you would do to solve these problems?

Ms. St-Marseille: People can no longer afford recreational activities. There are even some who have trouble affording a meal in a restaurant. The cost of living keeps going up, and with the price of vehicles, there are many who can no longer afford one. I find that as people in the regions age, the more their quality of life deteriorates. Those who live in big cities can take a bus as transportation. They can go to see a play or a movie. But here in the region, opportunities for entertainment are minimal. So the quality of life is not the same. In order to improve their situation, we could increase their pensions, but I know that comes out of budgets and everything is expensive. It is difficult to predict what will happen in the future. It is easy to ask the government to give more money.

Senator Lavigne: Thank you for being here and sharing your comments. Ms. St-Marseille, do you have a meals-on- wheels service, meals that are brought to homes as part of your work?

Ms. St-Marseille: No, we do not provide that service. Our organization, l'Équipe des bénévoles, used to be linked to another organization called meals-on-wheels. That was dissolved perhaps two years ago. There is another organization, l'Entraide de la Haute-Gatineau, that collects food staples. I sat on the working group at one point, but I changed organizations. However, I am familiar with what goes on. L'Entraide de la Haute-Gatineau collects food staples. I am not familiar with all the resources.

Senator Lavigne: You only take care of transportation. You do not provide home health, visits. Do you also do that or is it done by another organization?

Ms. St-Marseille: It is only transportation. Other organizations do that.

Senator Lavigne: Mr. Labrecque, in your opinion, what is better: a subsidy or a tax cut, or a seven-year term for a business that starts up in your region to process forest products into something else? Is it better to have a tax credit, a tax deduction for accumulative losses over the first ten years of operation or a subsidy, according to your experience in the business?

Mr. Labrecque: Actually, it is a combination of all those things. It is not one single thing.

Senator Lavigne: What I mean is you receive certain things from the provincial government. Is what you get from the federal government different or could it be amalgamated? You would get something from the provincial level and the federal level could complement it?

Mr. Labrecque: According to my current experience with the federal government, because we are often involved in joint ventures with Economic Development Canada, is that it is very efficient for subsidizing the nuts and bolts. If you need equipment, they will finance that equipment. If you need to set up your facility, they will help you. Generally, it is when you get to working capital, or somewhat softer things, that you run into a bit more trouble. They need something a bit more concrete in order to invest.

The provincial government is also involved but generally speaking, they agree to finance a project overall rather than finance a portion of the project the way the federal government does. One of the major weaknesses we see right now, and that the federal government could help with, is the working capital. It is the hardest thing to finance, be it by a bank or through subsidies, provincial or federal. It is a little easier at the provincial level, but overall, that aspect is not covered. It is very difficult. It often puts a break on start-ups or development, the fact that you do not have the working capital to get well-established in the market. This weakness often leads the business person to make decisions that will kill the business or that will make it go off on a tangent which may not be the most efficient. It is an important issue.

Senator Lavigne: Is the Business Development Bank of Canada involved in providing working capital in these areas?

Mr. Labrecque: Yes, but those are loans at interest rates that are far from preferential. They require collateral like all the banks. They take a few more risks than a conventional bank, a bit like Investissements Québec. Investissements Québec also finances working capital. But that remains a loan that weighs heavily on the business, which mortgages its long-term development. So to help through subsidies would facilitate the start-up of certain projects that have a hard time getting off the ground.

[English]

The Chairman: Dorothée, I have a question on all the good things that you do with your organization. In your effort to assist these people at every level, do your volunteers meet people who are having difficulty with literacy.

I ask the question because at almost at every level in this country there are people who have great difficulty in reading and writing and it affects their lives in very profound ways. I wondered whether this was evident in the kind of work you do.

Ms. St-Marseille: I have not received comments on that specific problem.

The Chairman: That is very good news.

Ms. St-Marseille: I know that the people have to sign forms and they can sign their names.

The Chairman: Thank you very much both of you. It was wonderful to have you here today.

The committee adjourned.